Austin Long-Range Plan

7/20/2015

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LONG RANGE MASTER PLAN

▪ The Need ▪ The Possibilities ▪ The Plan

for Moving Forward

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LONG-RANGE MASTER PLAN – BACKGROUND

Convention Center success is far-reachingHospitality/Tourism industry – local jobs, small business

Hotels, Restaurants, Taxi, Valet, Entertainment2014 - $5.9 billion economic impact on local spending*2014 - 48,900 industry jobs*

*data from State of Texas Office of Governor, Economic Development and Tourism Estimates

The NEED: Keep Hospitality Industry & Convention Center Thriving/Successful2

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Local Travel-Generated Tax revenuesTaxes from Hotel Occupancy, Rental Car, Sales, & Property

Reported amounts from the State include taxes generated from both visitors and residents/businesses within the tourism industry2014 Local Tax Impact of $173.5 million* – including:

$68.1 million in Hotel Occupancy Tax$ 8.6 million in Rental Car Tax$30-35 million in City’s General Fund Taxes – Sales & Property

*data from State of Texas Office of Governor, Economic Development and Tourism Estimates



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Contributions to the City’s General Fund - Historical Look

The NEED: Keep Hospitality Industry & Convention Center Thriving/Successful

2002 2004 2006 2008 2010 2012 2014

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$0$5

$10$15$20$25$30$35$40

FY02 FY04 FY06 FY08 FY10 FY12 FY14

Mill

ions

City of Austin General Fund Travel-Generated Tax Revenue (In millions)


$16.1 million $18.3 million $22.3 million $23.7 million $24.1 million $28.6 million $34.9 million

Average bi-annual growth of $3.1 million, or 14%

117% increase from 2002 – 2014

Estimated City Sales/Property Tax Generated:

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Convention Center’s Success – Historical Look

1999 2002 2004 2008 2012 2015 2029


FY99 Total HOT collected =

$24.6 million

Convention Center 2% Venue Tax

Assessed

5

$0

$20

$40

$60

$80

$100

Mill

ions Total Hotel Occupancy Tax Collections (In millions)


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Convention Center’s Success – Historical Look


$24.6 million

Convention Center 2% Venue Tax

Assessed

Convention Center Northside

Expansion Complete

City-ownedHilton Opens

FY15 *est. Total HOT collected=$76.2 million

Total Estimated Room Nights of

ACC events-269,000


Current ACCVenue

ScheduledRetirement


$45.2 million

Total Estimated Room Nights of

ACC events-172,000

Circuit of the Americas (COTA)

Opens

1999 2002 2004 2008 2012 2015 2029

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$0

$20

$40

$60

$80

$100

Mill

ions Total Hotel Occupancy Tax Collections (In millions)


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Hotel Occupancy Tax (HOT) – Closer LookHOT uses governed by Texas State Tax Code, City Code and Bond Covenants

4.50%

1.45%

1.05%

2.00%

9% HOT Distribution

ACC Facility/Ops

ACVBSales/Marketing

Cultural Arts

ACC Venue

Austin Convention Center = ACCAustin Convention & Visitors Bureau = ACVB



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Hotel Occupancy Tax (HOT) – Closer Look

Hotel Occupancy Tax Collections(in millions)

FY 1999 FY2015*est. Increase Cumulative

ACC Facility $12.6 $38.1 $25.5 $348.9

ACVB $ 4.1 $12.3 $ 8.2 $112.4

CulturalArts

$ 2.9 $8.9 $ 6.0 $ 81.4

ACC Venue $ 5.0 $16.9 $11.9 $154.4

Total $24.6 $76.3 $51.7 $697.1

210% increase



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LONG-RANGE MASTER PLAN – THE NEED

Current state of the Austin Convention Center Facility

Hotel Occupancy Tax (HOT): +210 % increase from 1999 to 2015*est.

Hotel Inventory: +46% increase from 2004 to 2015

Convention Center occupancy is at practical maximum

Facility growth at 0%, since 2002

With new hotel inventory, existing building is too small

Ratio of rooms to exhibit space highest among peers/competitors

The NEED: Keep Hospitality Industry & Convention Center Thriving/Successful 9

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Consequences of Austin Convention Center Non-Expansion

Competitiveness in convention market at risk

General Fund & Hotel Occupancy Tax contributions decrease

Lost jobs

The NEED: Keep Hospitality Industry & Convention Center Thriving/Successful 10

LONG-RANGE MASTER PLAN – THE NEED

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LONG-RANGE MASTER PLAN – THE PROCESSIn 2013, Consensus Reached on Need for Long-Range Plan

Resulted in Independent Assessment via Deliberate Process

The PROCESS: Assess Convention Center Current State & Recommend Steps for Future

March 2014

May 2014

June 2014

July 2014

Aug/Sep 2014

Dec 2014

Jan 2015

March 2015

April 2015

May/Jun2015

Gensler Team finalizes report

& ACCD, Gensler & ULI present Long-Range Plan to City

Management and Council

ULI’s TAP performs work and completes

report

Gensler Team completes final draft

report

Gensler Team finalizes in-

depth market analysis

Council directs City Manager to engage ULI

to review Gensler report

Gensler Team provides update to City Manager

and holds second planning

workshop w/ stakeholders

Gensler Team holds first planning

workshop w/ stakeholders & meets w/

ACVB Customer Advisory Board

Kickoff stakeholder/

research process

Council approves

Gensler Team to create Long-

Range Plan

Gensler Team conducts in-person

interviews and web-based

survey

Gensler Team – M. Arthur Gensler Jr. & Associates, Conventional Wisdom, Inc., Johnson ConsultingACVB – Austin Convention and Visitors BureauULI – Urban Land Institute AustinTAP – ULI’s Technical Assistance PanelACCD – Austin Convention Center Department

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AUSTIN CONVENTION CENTER VISION SESSIONMAY 5, 2014 AUSTIN, TX

“This is to be the roadmap for our future…for implementation.”ACC is…• Adaptable• Convenient• User-Friendly• Customer-Focused• Poised To Take The

Next Step

• Too Small• Under-Achiever• Not Too Competitive• Difficult To Navigate• A Challenging Facility

“Where do we fit in the competitive marketplace?”

“For 30 years, Meeting Planners have used the same five criteria for selecting cities to host trade shows and conventions…”

1. Convention Center Facilities2. Hotel Room Supply3. Transportation4. Amenities & Attractions5. Safety & Security

“…to be successful, solve for the weakest link.”

Gensler12

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With City Council approval, Convention Center sought industry experts to create plan.

Gensler, Conventional Wisdom and Johnson Consulting

Employed process involving stakeholder input and analysisHeld multiple planning sessions and workshops to gather input

Participants included City executives & staff, hoteliers, customers and industry stakeholders

Developed 6 options for evaluation Ranged from no expansion, to expansion in various directions and relocationUtilized market analysis and stakeholder input to evaluate each option

Performed in-depth economic & market analysis of current state & options

Thorough, deliberate process spanned 7+ months

Arrived at recommendation for expansion with proposed option

The POSSIBILITIES: Hospitality Industry & Convention Center Can Remain Thriving/Successful

LONG-RANGE MASTER PLAN – THE POSSIBILITIES

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The PLAN: Expand to Keep the Hospitality Industry & Convention Center Thriving/Successful

LONG-RANGE MASTER PLAN – THE PLAN

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Recommended Option is to expand West – Non-contiguous

Facility AttributesAdd 200,000 SF of exhibit spaceAdd 65,000 SF of meeting spaceAdd 56,700 SF of ballroom spaceAdditional underground parking and loading dock/service area

Connectivity AttributesLeave Trinity Street openProvide event access between buildings with overhead walkways/bridges

Amenity Attributes Include open/green event space on top of new structureInclude mixed-use elements onsite (dependent on land-acquisition method)

“Convention Center District”Identify funding that allows for major improvements in area to create vibrancyin and interaction with immediate area

Estimated Project Cost - $400 - 600 million (excluding land acquisition)



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Hotel on Cesar Chavez Street as shown in the master plan

Hotel on north end of Phase IIIexpansion

Phase III expansion with no hotel


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The corner of San Jacinto and Cesar Chavez with streetside restaurants and retail.


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The corner of Trinity and Cesar Chavez Streets showing Trinity blocked off for an outdoor street.


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Following City Council direction, Convention Center utilized independent party to evaluate the Gensler team recommendation

Urban Land Institute (ULI) Technical Assistance Panel (TAP)Conducted April 14 – 15, 2015

TAP consisted of 5 industry experts

Process included:Review of Gensler’s reportSite tourExtensive interviews with stakeholdersMeetings with City staff and Gensler team

Agreed with Gensler’s master plan conclusion and proposed option

Urges Convention Center to be bold and visionary in plans


LONG-RANGE MASTER PLAN – THE POSSIBILITIES

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1. The Panel agrees with the Master Plan’s conclusion that an expansion is necessary and to utilize Option 3b (West, non-contiguous) for the expansion.

2. Expand with a design plan to create a convention center district that would include funding for Brush Park, the Red Line Station and Waller Creek so that the entire area becomes an 18-hour district for both Austinites and convention visitors.

3. Design should include street-level culture venues, retail and restaurant space to prevent the current “dead zone” feel around the existing convention center.

4. Fund visionary expansion and district development through an increase in the Hotel Occupancy Tax up to 17%.

5. Purchase land now through the use of options, public-private partnerships or other joint venture structures to secure needed expansion land without the restrictions caused by use of eminent domain and condemnation.

6. Be bold and visionary in the plans for the district to create a long-term signature solution for Austin.

Summary of Major Recommendations and Conclusions


LONG RANGE MASTER PLAN – THE POSSIBILITIES

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Short Term Strategy Acquire land

Acquisition method is key to vision of mixed-use componentsFinancing method dependent on timing and cash position

Preliminary Design/DevelopmentSolicitation for Design/Development Team Financing method dependent on timing and cash positionSolicitation for Third-Party Partnerships

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Long Term Financial StrategyRe-define and extend current Venue Project 2% HOT

Attorney General Public Finance Division guidance neededSubject to voter approval

Pledge 4.5% HOT and other ACC revenue to maximize debt capacityConservative financial forecasts estimate $400 million in new debt capacity Seek additional funding capacity through Third-Party financing opportunities

The PLAN: Expand to Keep the Hospitality Industry & Convention Center Thriving/Successful 23

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LONG-RANGE MASTER PLAN – PROJECT TIMELINE


August 2015

Aug ‘15-Nov ‘16

November 2016

Nov ‘16-Nov ‘18

November 2018 2019 2020 November

2021

Open

Construction

Construction

Break Ground

Land Acquisition

and Preliminary

Design

Presentation of Long-Range

Plan to City Council

Complete Design Work

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Venue Tax to Austin Voters

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Austin Long-Range Plan

Documents

Transcript of Austin Long-Range Plan